A further update on Island's takeover

Island Oil & Gas says talks with San Leon Energy nearing conclusion

27 January 2010

Irish exploration group Island Oil & Gas today said that talks over a coming together with compatriot San Leon Energy were close to reaching a conclusion.

Discussions between the two sides have been ongoing since San Leon first announced its 1 for 2.3 all share possible offer for Island back in October last year. Since then, Island has said it would recommend a deal if San Leon made a firm offer on those terms.

Meanwhile, Island has continued to try and build value in its Moroccan and Irish asset portfolio. The company secured two new offshore petroleum agreements for contiguous areas of Sidi Moussa and Foum Draa, Morocco, and is now partnering Serica Energy on those licences.

Elsewhere, there were encouraging preliminary results from 2D seismic reprocessing on Tarfaya, also in Morocco, and the Zag reconnaissance licence was advanced to full exploration licence by the operator, San Leon Energy.

Earlier plans to sell its assets in the Celtic Sea, including stakes in the Old Head of Kinsale and Schull fields, were ditched following the offer from San Leon Energy.

Paul Griffiths, Island’s chief executive, said: “Whilst we looked at every option available to us to develop these assets ourselves, it became obvious that the best way forward for Island and its shareholders was the merger which was tabled by San Leon, post the year end. The businesses are an excellent fit and the enlarged group will have the ability to develop a material energy business.”

[from SmallCap News]